Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

<ul><li><keyword id="15492" type="CITY" weightage="20" keywordseo="Vodafone">Vodafone</keyword> Group Plc has won the $2 billion tax dispute case against the Indian government.</li><li>The international tribunal has ruled that the Indian government’s decision to impose tax retrospectively is in breach of the investment treaty between India and the Netherlands.</li><li>The Indian government had retrospectively imposed capital gains tax on Vodafone’s acquisition of Hutchison Whampoa in 2007.</li></ul>Vodafone Group Plc has won the $2 billion tax dispute case against the Indian government. The case was filed by Vodafone in an international tribunal headed by Sir Franklin Berman, a leading UK barrister. According to a <a href="https://in.reuters.com/article/india-vodafone-group-arbitration/vodafone-wins-international-arbitration-against-india-in-2-billion-tax-dispute-case-sources-idINKCN26G1D1?il=0">Reuters report</a> quoting unnamed sources, the arbitration has ruled that the Indian government’s decision to impose tax retrospectively on Vodafone is in breach of the investment treaty between India and the Netherlands. A 14-year long dispute comes to an end Vodafone had knocked on the doors of the international arbitration tribunal in 2018, questioning the Indian government’s decision to retrospectively impose capital gains tax on its acquisition of Hutchison Whampoa in 2007. In 2007, Indian tax authorities served a notice to Vodafone International Holdings BV for failing to deduct withholding tax from Hutchison Whampoa on its acquisition. Vodafone challenged this in the Supreme Court, which ruled in its favour in 2012. However, the Indian government then went back and passed legislation, giving it powers to charge tax retrospectively. It then raised a demand of capital gains tax of ₹7,970 crore on Vodafone, which ballooned to ₹22,100 crore after interest and penalties. In 2018, Vodafone challenged this decision under the Netherlands-India Bilateral Investment Treaty. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-rebrands-as-vi-as-it-gears-up-for-its-second-innings/articleshow/77973120.cms">Vodafone Idea rebrands as Vi as it gears up for its second innings, says ‘not shy’ to hike tariffs</a>

Vodafone wins $2 billion tax dispute case against the Indian government

<ul class="p-rich_text_list p-rich_text_list__bullet"><li>India has decided to do away with a 2012 law that allowed the government to tax profits from earlier years even though theywere not taxable at the time.</li><li>This brings to end a decade-long tussle with foreign companies that saw the law as a deterrent to investments in India.</li><li>Finance Minister Nirmala Sitharaman introduced 'The Taxation Laws (Amendment) Bill, 2021' which will undo the damage from the 2012 law.</li><li>The bill also proposes to refund the amount paid so far, in these cases, without any interest thereon.</li></ul>In a bid to bury the ghost of retrospective taxation, the government on Thursday brought a bill in the Lok Sabha to withdraw all back tax demands on companies such as Cairn Energy and Vodafone and said it will refund the money collected to enforce such levies. Finance Minister Nirmala Sitharaman introduced 'The Taxation Laws (Amendment) Bill, 2021' in the Lok Sabha that seeks to withdraw tax demands made using a 2012 retrospective legislation to tax the indirect transfer of Indian assets. The bill provides for the withdrawal of tax demand made on "indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012 (i.e. the day the <keyword id="996979" type="PERSON" weightage="20" keywordseo="retrospective-tax">retrospective tax</keyword> legislation came into being)." "It is also proposed to refund the amount paid in these cases without any interest thereon," it said. The bill has a direct bearing on long-running tax disputes with British firms Cairn Energy Plc and Vodafone Group. The Indian government has lost two separate arbitrations brought by the two companies against the levy of retrospective taxes. While the government has virtually no liability in the Vodafone case, it has to refund USD 1.2 billion to Cairn Energy for the shares of the company it had sold, tax refund withheld and dividends confiscated. The bill states that the issue of taxability of gains arising from the transfer of assets located in India through the transfer of shares of a foreign company (indirect transfer of Indian assets) was a subject matter of protracted litigation. The Supreme Court in 2012 had given a verdict that gains arising from indirect transfer of Indian assets are not taxable under the extant provisions of the Act. But to circumvent this, the provisions of the Income Tax Act, 1961 were amended by the Finance Act, 2012 with retrospective effect, to clarify that gains arising from the sale of shares of a foreign company is taxable in India if such shares, directly or indirectly, derive their value substantially from assets located in India. "Pursuant thereto, income-tax demand had been raised in 17 cases. In two cases assessments are pending due to stay granted by High Court," the objects of the Bill said. Out of the 17 cases, arbitration under Bilateral Investment Protection Treaty with the United Kingdom and the Netherlands had been invoked in four cases. "In two cases, the Arbitration Tribunal ruled in favour of the taxpayer and against the Income Tax Department," it said in a reference to arbitration awards won by Cairn and Vodafone. "The said clarificatory amendments made by the Finance Act, 2012 invited criticism from stakeholders mainly with respect to the retrospective effect given to the amendments. It is argued that such retrospective amendments militate against the principle of tax certainty and damage India's reputation as an attractive destination," it said. While the government has in the past few years brought major reforms in the financial and infrastructure sector to create a positive environment for investment in the country, "the retrospective clarificatory amendment and consequent demand created in a few cases continue to be a sore point with potential investors," it said. The country today stands at a juncture when quick recovery of the economy after the COVID-19 pandemic is the need of the hour and foreign investment has an important role to play in promoting faster economic growth and employment. "The Bill proposes to amend the Income-tax Act, 1961 so as to provide that no tax demand shall be raised in future on the basis of the said retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before 28th May 2012 (i.e., the date on which the Finance Bill, 2012 received the assent of the President)," it said. It further proposed to provide that the demand raised for indirect transfer of Indian assets made before May 28, 2012 shall be nullified on fulfilment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc shall be filed. It also proposed to "refund the amount paid in these cases without any interest thereon," it said. The bill proposes to amend the Finance Act, 2012 so as to provide that the validation of demand under section 119 of the Finance Act, 2012 shall cease to apply on fulfilment of specified conditions such as withdrawal of pending litigation and furnishing of an undertaking that no claim for cost, damages, interest, etc shall be filed. SEE ALSO <a href="https://www.businessinsider.in/tech/news/google-is-now-using-chrome-as-another-security-layer-for-account-sign-ins/articleshow/84975356.cms">Google is now using Chrome as an added security layer for account sign-ins</a> <a href="https://www.businessinsider.in/stock-market/news/how-to-check-allotment-status-of-glenmark-life-sciences-ipo/articleshow/84978486.cms">Glenmark Life Sciences IPO: How to check allotment status, listing date and more</a>

Indian government brings in a bill to bury the infamous retrospective tax that haunted Cairn and Vodafone for nearly a decade

<ul><li>The Centre on Thursday introduced the <keyword id="406098" type="PERSON" weightage="20" keywordseo="Taxation-Laws">Taxation Laws</keyword> (Amendment) Bill to bring closure to the retrospective income tax law which was introduced in 2012.</li><li>The UPA government in 2012 imposed capital gains tax retrospectively on some companies like <keyword id="11799509" type="UNKNOWN" weightage="20" keywordseo="cairn-and-vodafone">Cairn and Vodafone</keyword>.</li><li>British oil and gas company Cairn Energy is seeking to recover 1.2$ billion from India.</li></ul>The retrospective amendments attracted a lot of attention, both when they were first introduced in 2012 as well as over the years. In the recent past, two arbitral awards were issued under India’s Bilateral Investment treaties, which reignited the debate. In a welcome step, though delayed, in trying to put an end to this long-standing controversy, the Taxation Laws (Amendment) Bill, <keyword id="3718131" type="PERSON" weightage="20" keywordseo="2021">2021</keyword> (‘the Bill’) has now been passed by the Lok Sabha to withdraw the retrospective effect of these amendments. The proposal in the Bill addresses two distinct situations. The first is forward looking and provides that no order will be passed or demand raised going forward in respect of indirect transfer transactions that took place before 28 May 2012 (i.e. the date of enactment of the Finance Act, 2012). The second part relates to cases where orders of assessment, re-assessment, rectification or in withholding proceedings have already been passed in respect of pre-28 May 2012 transactions. In such cases, the orders are sought to be nullified. In such cases, the taxpayer is also entitled to a refund of taxes already paid in respect of such transactions, but without any interest being paid thereon by the Government. However, such nullification and grant of refund is not unconditional. The Bill requires the taxpayer to fulfil certain conditions, some of which are set out in the Bill and some which will be prescribed later. The conditions set out in the Bill include withdrawal by the taxpayer of all proceedings initiated by it as well as furnishing an undertaking waiving its right to claim costs, interest, damages or other relief from the Government. This is where the Bill will have maximum impact. The Statement of Objects and Reasons mentions that demands under these retrospective provisions have been raised in 17 cases, out of which arbitration proceedings under investment treaties had been initiated in 4 cases. In such cases, the order can be nullified and taxes paid (if any) can be refunded subject to the above conditions being fulfilled. Taxpayers in such situations will effectively have a choice to make. To some extent, this choice will also depend on what further conditions get prescribed in this regard. I only hope that this move settles the disputes and debate on this topic. <keyword id="11729733" type="UNKNOWN" weightage="20" keywordseo="see-also">SEE ALSO</keyword> <a href="https://www.businessinsider.in/business/news/byjus-last-two-acquisitions-and-a-deal-with-disney-reveal-its-american-dream/articleshow/84783749.cms">Byju's last two acquisitions and a deal with Disney reveal its American dream ⁠— one that is anchored in India</a> <a href="https://www.businessinsider.in/personal-finance/news/six-red-flags-for-investors-to-avoid-becoming-a-victim-of-misselling-by-agents-or-financial-advisors/slidelist/84782913.cms">Six red flags for investors to avoid becoming a victim of misselling by agents or financial advisors</a>

OPINION: Retrospective tax — Putting an end to a long-standing controversy

<ul><li>In 2007, Indian IT department slapped a demand notice seeking ₹8,000 crore in capital gains tax.</li><li>With penalty and interest included, the tax claim now amounts to ₹22,100 crore.</li><li>Resolution professionals say that all pending litigation have to be wrapped up before liquidating a company.</li></ul>The world’s largest telecom company Vodafone is on its backfoot in the world’s largest telecom market – India. And it is nothing new. Many troubles have dented the company ever it purchased the 67% stake in Hutchison Essar twelve years back. And it's been a nightmare for small investors who have bet on the stock. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[
<div class="flourish-embed" data-src="visualisation/932953"></div>
]]></cdata></div>



























































 A year before the price wars started eating into the investment, Indian Income Tax department slapped a demand notice seeking ₹8,000 crore in capital gains tax over the deal. Now this ghost which is a ₹22,100 crore liability with interest and penalty included – might haunt the British parent even as it considers liquidation. “All pending litigations have to be cleared before it goes in for liquidation,” Mamta Binani, a resolution professional informed Business Insider India. The case in currently in international arbitration after many dramatic twists. The former UPA government<a href="https://www.business-standard.com/article/companies/vodafone-back-to-square-one-112031700019_1.html"> retrospectively amended a</a> law to tax Vodafone, after the Supreme Court said that Vodafone is not liable as per ‘existing tax laws’. In the last six years, the arbitration has been dragging on at a snail’s pace. In the meanwhile, yet another Supreme Court decision has made Vodafone question the logic of continuing in India, amongst many hurdles. A few days back, its CEO Nick Read said that if Indian government does not provide a relief in the aggregate gross revenue (AGR) case--- it might<a href="https://www.businessinsider.in/business/corporates/news/vodafone-writes-off-book-value-of-indian-operation-ceo-flags-liquidation-risk/articleshow/72031766.cms"> consider liquidation</a>. Indian government is in no mood to relent and has given three months to Bharti Airtel and Vodafone Idea to clear its dues. Vodafone was asked to pay up ₹44,150 crore to the department in piled up AGR dues after it lost a case in the Supreme Court last month. This hit has made Vodafone Idea posted the highest-ever quarterly loss by Indian company at ₹50,000 crore. Should the company fall, it could set yet another dubious record as largest-ever non-performing asset or a dud loan. As per an<a href="https://timesofindia.indiatimes.com/business/india-business/lenders-fear-vodas-rs-1l-cr-turning-into-npa/articleshow/72063199.cms"> Economic Times report</a>, banks have an exposure of as much as ₹1,00,000 crore to Vodafone. These loans are in trouble as most of them lack securities and guarantees. Neither of the two promoters – Vodafone and Kumar Mangalam-led Aditya Birla Group— are keen on infusing equity. In fact, their stock is being sold at the price of hot cross buns -- ₹3 per share with a face value of ₹10. If Vodafone Idea is unable to pay up its lenders, it has assets to fall back on, say experts. “I think the assets, including the network and spectrum are definitely very valuable, so it would not come to a situation where surrendering should be required,” Kunal Bajaj, an independent telecom analyst told Business Insider India. Whether the asset will be able to offset the loans, deferred spectrum payment (not including AGR dues) it owes to the government and the tax claims if at all – is yet to be seen. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms" data-type="tilCustomLink" target="_blank">Vodafone-Idea is now a ₹3 stock after a shocking quarterly loss</a>

Vodafone has to wrap up ₹22,100 crore tax case before it can think of liquidating India business

<ul><li>The Supreme Court bench led by Justice Arun Mishra turned the heat on the government and telecom companies’ counsels during the adjusted gross revenue (AGR) dues cases hearing today.</li><li>Questioning the reliability of <keyword id="1553175" type="COMPANY" weightage="20" keywordseo="Vodafone-Idea">Vodafone Idea</keyword>, Justice Mishra asked the company’s counsel “How do we catch hold of you”, after calling it a foreign company.</li><li>Solicitor General Tushar Mehta also bore the brunt of Justice Mishra’s annoyance, and was told “your hands will be cut short”.</li><li><a href="https://www.businessinsider.in/">Check out the latest news and updates on Business Insider.</a></li></ul>Vodafone Idea and Airtel want to pay the unpaid spectrum licence fees and usage charges. But even as they hoped that the Supreme Court of India would concede this reprieve, the Justices Arun Mishra-led bench posed a series of thorny questions. “We want to catch hold of you (Vodafone). There’s so much liability on you. How should we catch hold of you?” asked Justice Arun Mishra and followed it up with a barb that it is a foreign company. Interestingly, Vodafone Idea’s shares ended the session 1% higher, and Airtel closed up 2%, while the judges put the companies in a tough spot at court. <div type="image" title="Vodafone Idea Airtel share price" msid="77067486" hostid="261" caption="&amp;lt;p&amp;gt;Share price of Vodafone Idea and Airtel in the last one week&amp;lt;/p&amp;gt;"></div> Vodafone Idea counsel Mukul Rohatgi had a tough time fending off these barbs from the top court hearing the case on adjusted gross revenue (AGR). The Supreme Court in February this year <a href="https://www.businessinsider.in/business/news/birla-meets-telecom-secy-as-voda-idea-stares-at-over-rs-53000-cr-agr-dues/articleshow/74193134.cms">ordered</a> telecom companies to pay up a disputed amount retrospectively for over a decade. Since then, the appeal has been pending the apex courts’ verdict. <div type="Article" hostid="261" msid="76440420" title="Vodafone Idea says it’s ‘barely afloat’, appeals Supreme Court to stagger spectrum payments over 20 years" mstype="2" mssubtype="0"></div> <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">AGR demand (in crore) </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Vodafone Idea </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹58,254 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Airtel </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹43,980 </td></tr></tbody></table> Why is the court so apprehensive about Vodafone-Idea being able to repay the dues? Vodafone Idea is the most troubled of all telecom operators in India. The company just posted a ₹73,878 crore loss in just three months, a record for any Indian corporate. The counsel Rohatgi also went on to say that the only asset left with the company is the spectrum. Yet, Rohatgi highlighted that the company had already coughed up ₹7,854 crore, on account of AGR, despite the mounting losses and tax refunds pending from the government to the tune of ₹8,000 crore. But the court was more keen on knowing how the company owned by the Aditya Birla Group in India plans to repay the remaining ₹50,339 crore. In the <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-shares-plunge-over-6-after-supreme-court-asks-for-an-undertaking-to-cough-up-53000-crore/articleshow/76317790.cms">previous hearing held on June 18</a>, the Supreme Court bench led by Justice Arun Mishra asked Vodafone Idea, Airtel and other telcos to submit their books of accounts and other financial documents for the past 10 years. This time, too, he reminded both Airtel and Vodafone Idea that he could order that any time now. Even the government faces the heat Turning the heat on the Solicitor General (SG) Tushar Mehta who represents the Department of Telecommunications (DoT), Justice Mishra <a href="https://twitter.com/LiveLawIndia/status/1285149179950530562">said</a>, “We will reject everything and ask everyone to pay right now. Why are these self-assessments being done?”. Justice Mishra also appeared annoyed with the SG, <a href="https://twitter.com/barandbench/status/1285149567164379137">saying</a>, “You are the solicitor general and you cannot do this. You cannot commit contempt on this court? What is this nonsense?”. “Do not think you have very big hands. We will cut it short,” Justice Mishra was also <a href="https://twitter.com/barandbench/status/1285151066980409345">quoted</a> as saying by Bar &amp; Bench. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-shares-plunge-over-6-after-supreme-court-asks-for-an-undertaking-to-cough-up-53000-crore/articleshow/76317790.cms">Vodafone Idea shares plunge over 13% after Supreme Court asks for an undertaking to cough up ₹53,000 crore</a> <a href="https://www.businessinsider.in/stock-market/markets/news/a-deal-with-google-is-not-the-only-lifeline-vodafone-idea-is-betting-on/articleshow/76086104.cms">A deal with Google is not the only lifeline Vodafone Idea is betting on</a> <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-and-its-timeline-of-woes/articleshow/74577942.cms">Vodafone Idea and its timeline of woes</a>

'How do we catch hold of you' – India's Supreme Court asks Vodafone Idea and that was just one of the many barbs

New Delhi, Nov 19 () Vodafone Idea, India's third-largest telecom service provider, is seeking about Rs 7,000 crore in tax refunds for past years even as it faces fresh statutory dues liability - running into thousands of crore - that has put the income tax department in a bind, sources privy to the development said.
The tax department has in past adjusted refunds against a company's other liabilities towards the government. It had famously adjusted Rs 1,500 crore in tax refunds due to Cairn Energy plc of UK to part settle a retrospective tax demand of Rs 10,247 crore even though the matter was under arbitration.
Sources said Vodafone has to receive an aggregate of about Rs 1,000 crore from Mumbai unit of income tax department and another Rs 6,000 crore from its Delhi office for multiple assessment years dating back to 2004-05.
The company has got favourable rulings from High Courts and appellate tribunals in some and is now pressing the department to quickly refund the dues, they said.
The income tax department is, however, caught in a bind as Vodafone-Idea Ltd has to pay Rs 44,150 crore to the government in past statutory dues following the Supreme Court ruling that non-telecom revenues have to be included for calculating the payout towards license fee and spectrum usage charge.
Sources said the department is of the view that the refund should be adjusted against this demand as there have been some concerns raised in a section of media about the very existence of the company if it were asked to cough up the past statutory liabilities.
The department wants the Finance Ministry in consultation with the Telecom Ministry to decide on dealing with the refund.
Vodafone Idea declined to comment on an email sent to the company on the matter.
Vodafone Idea, last week, reported a consolidated loss of Rs 50,921 crore -- the highest ever loss posted by any Indian corporate -- for September quarter on account of liability arising out of the Supreme Court's order in the adjusted gross revenue (AGR) case.
The Supreme Court ruled in favour of the government and directed telecom companies, including Vodafone Idea, to pay dues as demanded by the Department of Telecom. Vodafone Idea has said that its ability to continue business will depend on reliefs sought from the government and positive outcome of the legal option it has (the company is in the process of filing a review petition on the AGR matter).
Both Vodafone India and Idea Cellular merged their telecom business to handle the tariff war in the sector, triggered by the new entrant Reliance Jio in 2016. The merged entity Vodafone Idea came into existence on August 31 last year as the biggest telecom operator in the country with 408 million mobile customers. 
However, the financial woes for the company did not end and the company lost over 100 million mobile subscribers since merger due to the cut throat tariff war, and chasing higher revenue-yielding minimum recharges.
The company has been investing in building networks. However, low return from tariffs added to its financial worries.
The older telecom operators -- Vodafone Idea and Bharti Airtel -- are staring at massive financial outgo in unpaid statutory dues as Supreme Court has upheld government's way of calculating the telecom revenue, on which licence fee and spectrum charges are computed.
As per latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies.
The Supreme Court has allowed three months to the affected telcos to cough up the amounts due to the DoT, and recently the telecom department shot-off notice to telcos to pay their revenue share dues within the timelines stipulated by the court. The department has given option to operators to clear all the dues on self-assessment basis. MBI ANZ BAL

Vodafone Idea presses for Rs 7,000 cr tax refund; I-T dept hesitant in view of fresh liability

The government today said that it is open to out-of-court settlement with <keyword id="15492" type="CITY" weightage="80" keywordseo="Vodafone">Vodafone</keyword> and Cairn on tax cases, where the arbitration process has been initiated. 
 "As far as out of court settlement for Vodafone is concerned we have always said that we are prepared to discuss with friends and colleagues in Vodafone in good faith as to whether it might be possible to get to negotiated settlement we are always open to those discussions," Minister of State for Finance <keyword id="6357677" type="PERSON" weightage="80" keywordseo="Jayant-Sinha">Jayant Sinha</keyword> said. 
 
Foreign investors like Vodafone have dragged government to arbitration over a Rs 20,000 crore tax dispute arising out of retrospective applicability of the tax law. 
 British oil explorer <keyword id="128650" type="COMPANY" weightage="80" keywordseo="Cairn-Energy">Cairn Energy</keyword> plc has also initiated a similar move over Rs 10,247 crore tax liability due to the same reason. 
 
The basic tax demand for Vodafone was Rs 7,990 crore but the total outstanding, including interest and penalty, is estimated to have risen to Rs 20,000 crore. 
 
While both the central government and Vodafone have named their arbitrators, they have not yet been able to agree on a third arbitrator to preside over the proceedings. 
 
The case relates to the retrospective amendment of the I-T laws carried out by the UPA government in 2012 to overturn the Supreme Court verdict, which had favoured Vodafone. 
 
Cairn had in April named former Bulgarian minister and lawyer Stanimir A Alexandrov as its arbitrator in the matter. India on its part has said it would soon appoint an arbitrator in the tax dispute. 
 Asked if the government is considering out-of-court settlement for Vodafone, CBDT Chairperson <keyword id="2573203" type="PERSON" weightage="80" keywordseo="Anita-Kapur">Anita Kapur</keyword> told PTI, the government is always in the favour of reducing litigation. 
 
"We will have to wait for some developments. The government is always open to reduce litigation dispute by whatever ways it is possible." 
Sinha also said that the most comprehensive efforts to reduce litigation is by elimination of exemptions and reducing corporate tax rates. 
 
"The other thing that we have underway is simplification of the tax code...so whether it is through cleaning up or streamlining exemptions, whether it is simplifying the tax code, we are absolutely trying to reduce the amount of litigation that is in the system right now," he said. 
 
"Our goal is to ensure that our tax system is fair, it's simple, it's predictable... Our endeavor with respect to all these specific cases is that we always we will attempt in all good faith to try and settle them. That remains our consistent principle for these specific cases," he added. 
 
Image credit: Indiatimes

Government open to out-of-court settlement with Vodafone and Cairn on tax cases

<ul><li><keyword id="6411578" type="PERSON" weightage="20" keywordseo="ajay-piramal">Ajay Piramal</keyword> received ₹8,900 crore, a whopping 52% return or $1.4 billion as per the exit agreement from vodafone-Idea.</li><li>Singh however exited <keyword id="6354923" type="UNKNOWN" weightage="20" keywordseo="vodafone-india">Vodafone India</keyword> in 2014 by selling his entire stake to its parent company Vodafone for ₹1, 241 crore.</li><li>Essar agreed to sell their stake at $5 billion which was a part of the deal</li><li>Here is a look at these three wise men</li></ul>The owners and shareholders of Vodafone Idea alike are nervous about its survival. All thanks to Supreme <a href="https://thewire.in/business/apex-court-verdict-on-agr-how-much-will-indias-telecom-industry-have-to-cough-up">Court’s move to support Indian telecom department</a> over a dispute on revenue calculations. That means <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms">Vodafone is saddled with a bill of ₹44,150 crore</a>. But not all those who invested in Vodafone have lost. In fact, <a href="https://www.business-standard.com/article/companies/wherever-vodafone-investors-go-hefty-returns-follow-114041500133_1.html">three investors made the right bet at the right time</a> and walked away with handsome profits. Here is a look at these three wise men Ajay Piramal makes 52% returns on his investment 
 
 <div type="image" title="92B4DAAC-D1DC-4A32-871D-5FF038B7F854" msid="72104716" hostid="261"></div>





 Right after the first telecom war cooled off, Vodafone India (before merger with Idea) was back in the green due to reduced competitive intensity. That is when Vodafone was planning to go ahead with a public offer. One of the pre-IPO investors was Ajay Piramal who via Piramal Enterprises purchased 11% stake in 2011-12. He paid ₹5,864 crore but when it became obvious that the IPO plans were not going through, he also sold them in 2014. And, <a href="https://www.forbes.com/sites/naazneenkarmali/2013/12/06/indian-billionaire-ajay-piramal-to-get-500-million-windfall-from-vodafone-stake-sale/#645833232d13">he received ₹8,900 crore</a>, a whopping 52% return or $1.4 billion, as per the exit agreement. Putting it simply, he received a listing premium for an IPO that never happened. Now of course, the Piramals are associated with the reigning telecom giant Jio, by marriage. Ajay Piramal’s son Anand Piramal is married to Isha Ambani, the daughter of Mukesh Ambani, the owner of Reliance Industries. Analjit Singh exits his legacy investments for ₹1, 241 crore 
 
 <div type="image" title="82934EBA-B059-4CCC-858B-3A8DCF4A3C9B" msid="72104723" hostid="261"></div>





 <a href="https://www.thehindubusinessline.com/info-tech/analjit-singh-appointed-vodafone-india-chairman/article23065539.ece">Analjit Singh</a>, the founder and chairman of Max India, and his wife held 24.65% in Vodafone through Scorpio Beverages. He <a href="https://www.business-standard.com/article/technology/essar-exits-vodafone-for-5-bn-111040100124_1.html">had been with the Hutch group</a> before it was purchased by Vodafone and also increased in stake later. Singh however exited Vodafone India in 2014 by selling his entire stake to its parent company Vodafone for ₹1, 241 crore. He got <a href="https://economictimes.indiatimes.com/industry/telecom/analjit-singh-to-get-1/7th-of-what-piramal-will-get-for-exiting-vodafone/articleshow/26973026.cms?from=mdr">1/7th of what Piramal received</a>, as the British parent was increasing its stake in the company. He currently heads Max Group that comprises of three holding firms, namely Max Financial Services, Max India and Max Ventures and Industries. The Ruias of Essar call in the cash with their put option 
 
 <div type="image" title="A698D098-A485-469C-B4D2-DBC3D4242835" msid="72104792" hostid="261"></div>





 When Ruias of Essar sold 67% of controlling stake to Vodafone in 2007, they never exited completely. They had held 33% minority stake in the company. The former deal which landed Vodafone in an <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms">unexpected tax case</a>, also provided Ruias with a put option to exit their investment. During the start of this decade, Vodafone was planning an IPO and buying out all the minority shareholders. After multiple rounds of <a href="https://www.business-standard.com/article/technology/essar-exits-vodafone-for-5-bn-111040100124_1.html">negotiating and dilly dallying</a>, Essar agreed to sell their stake at $5 billion which was a part of the deal. However, since the 2007 deal was brokered, the value of India business had gone down due to severe competition as Tata DoCoMo made an entry in 2008. See also: <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms">Vodafone-Idea is now a ₹3 stock after a shocking quarterly loss</a> <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms"> </a><a href="https://www.businessinsider.in/business/corporates/news/vodafone-writes-off-book-value-of-indian-operation-ceo-flags-liquidation-risk/articleshow/72031766.cms">Vodafone CEO Nick Read hints at a possible collapse without government support</a>

Three wise men who exited Vodafone India just in time to make millions

<ul><li>The Indian government budgeted for aggregate gross revenue (AGR) dues in the budget document. </li><li>The government expects ₹1,33,027 crore in telecom revenue for 2020-21. </li><li>Telecom industry sources say they are afraid that the government is in no mood to provide any of the relaxations in dues. </li></ul> Bharti Airtel and Vodafone Idea’s game plan of miring the payment of spectrum dues in <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/sc-may-hear-telcos-modification-pleas-on-agr-verdict-on-monday/articleshow/73789612.cms">endless legal wrangles </a>might not bear fruit. The Indian government has already budgeted for aggregate gross revenue (AGR) dues in the budget document, but for the next financial year. In the non-tax revenue receipts, the Indian government recorded ₹1,33,027crore in telecom revenue for 2020-21 against ₹58,989.6 crore in the <a href="https://telecom.economictimes.indiatimes.com/news/govt-sees-125-jump-in-fy21-revenue-mop-up-from-telecom-driven-by-agr-collections-spectrum-sale/73838739">current financial year</a>. Industry experts fear that a big chunk of the 125% jump may be on account of the unpaid dues for licence fees and spectrum usage charge that has fallen on the operators after the recent loss in the case at Supreme Court. This may also include as much as ₹25,000 crore from a proposed spectrum sale this year, according to another expert. However, in the absence of clear communication from the government, it is not clear how much the government plans to extract from the mobile operators. Airtel owes as much as ₹35,000 crore to the government after the Supreme Court allowed them to change the definition of licencing fees to include non-telecom revenues that the licensors make - as well. Vodafone Idea owes a whopping ₹53,000 crore to the government - an amount that has threatened its ability to survive. The Budget column has sent shivers down the spine of both the operators who have been trying every trick in the book -- including requesting extra time, staggering payments or even a relaxation in the interest and penalty amounts. Reliance Jio has made provisions for its dues Mukesh Ambani owned Reliance Jio has already paid up its AGR dues with no complaint, as per the January deadline suggested by the Supreme Court. However, the amount it had paid is a fraction of the other two top players - at ₹195 crore. It has made a provision for it in the third quarter earnings as well. On the other hand, reports have also emerged that Tata Teleservices which owes around ₹14,000 crore is also known to be arranging for funds to pay up for their dues. Airtel has agreed to acquire the company, but the merger has not yet been approved. The fact that other operators have already paid up might have an adverse effect on Vodafone and Airtel’s ability to seek relaxation. According to banking sources, few banks are keen on taking on the burden of providing a large-scale credit line to telecom operators which are in trouble. “Finance ministry officials have called us to ask if we are lending money to telecom companies. They asked us to take permission from them if we are planning to go ahead with loans,” the senior vice president of a top bank told Business Insider. Not just telcos, even state-owned companies like GAIL, Oil India, Power Grid and Gujarat Narmada Valley Fertilisers &amp; Chemicals were also sent demand notices. As per telecom department’s calculations, these companies owe as much as ₹4.39 lakh crore. SEE ALSO <a href="https://www.businessinsider.in/budget/news/startup-esops-to-be-non-taxable-for-five-years/articleshow/73824551.cms?src=hp_ts">Good news for startup employees - your ESOPs won’t be taxed for five years</a> <a href="https://www.businessinsider.in/budget/news/india-moves-to-unlock-value-from-insurance-behemoth-lic-whose-corpus-is-at-31-lakh-crore/articleshow/73836245.cms?src=hp_wh">The biggest IPO of the next financial year ⁠— LIC, whose corpus is at ₹31 lakh crore</a>

Hey Airtel and Vodafone-Idea! Budget 2020 may have accounted for its pound of flesh

New Delhi, The government's decision on mandatory payment of at least 1% of <keyword id="10497869" type="UNKNOWN" weightage="20" keywordseo="gst-tax-liability">GST tax liability</keyword> in cash will impact only around 40,000 to 45,000 taxpayers but help the entire system curb the menace of fake ITC availment and <keyword id="38388" type="ORGANIZATION" weightage="20" keywordseo="operation">operation</keyword> of fly-by-night operators, sources in <keyword id="1549446" type="COMPANY" weightage="20" keywordseo="The-Finance-Ministry">the finance ministry</keyword> said on Saturday. Based on the recommendations of <keyword id="10283255" type="COMPANY" weightage="20" keywordseo="the-gst-law-committee">the GST Law Committee</keyword>, the government has notified <keyword id="10497871" type="UNKNOWN" weightage="20" keywordseo="new-indirect-tax-rules">new indirect tax rules</keyword> that makes cash payment of 1% of GST tax liability mandatory for businesses whose <keyword id="10497870" type="UNKNOWN" weightage="20" keywordseo="taxable-supply-value">taxable supply value</keyword> exceeds ₹50 lakh. This change will come into effect from January 1, 2021. Sources in department of revenue said data indicated out of the total GST tax base of 1.2 crore taxpayers only around 4 lakh taxpayers have supply value greater than ₹50 lakh, and only around 1.5 lakh out of these 4 lakh taxpayers pay less than 1% tax in cash. So, the changes would include only a <keyword id="4473154" type="PERSON" weightage="20" keywordseo="small-section">small section</keyword> of taxpayers. Moreover, the DoR sources said with exclusions around 1.05 lakh taxpayers get further excluded from these 4 lakh. Thus, the rule would apply only to about 40,000 to 45,000 taxpayers. This would be around 0.37% of the total GST tax base of 1.2 crore taxpayers. "The data clearly indicates that a small fraction of taxpayers would need to pay 1% of GST liability in cash. Moreover, the rule is clearly for businesses whose taxable value of supply exceeds ₹50 lakh, so the measure would not affect small businesses or increase their working capital requirement," sources said. Under the new rule cash payment of 1% is to be calculated on the tax liability in a month and not turnover of the month. For example, if the turnover of taxable supplies of a taxpayer is ₹100 in a month and he is required to pay GST of 12% on his output taxable supplies, then he will be required to pay 1% of ₹12, i.e., ₹0.12 (12 paisa) only in the month through cash under this rule. Therefore, the net requirement of cash payment will be only 0.12% of the turnover in such a case, finmin sources said citing another example, if a dealer has made sale of ₹1 crore of the goods whose tax rate is 12 per cent and if he is discharging his tax liability more than 99% through input tax credit (ITC) then he has to pay only ₹12,000 under this rule. The rule clearly identifies where the risk to revenue is high and imposes very reasonable cost to deter the fraudsters in a multi-layered fraud of ITC, said the sources. The government had notified the cash rule to curb fake ITC availment and passing on of such credit by unscrupulous persons who generally pay no tax in cash, particularly in those risky cases where GST turnover does not match with the income tax returns. Such registered person will not be able to use the amount of ITC available in electronic credit ledger to discharge his liability towards output tax in excess of 99% of such tax liability. At least 1% liability would need to be discharged in cash. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-mrs-bectors-ril-bharti-airtel-vodafone-idea-ilfs-interglobe-aviation-future-group-deepak-nitrite-jubilant-foodworks-and-others/articleshow/79933826.cms">Top stocks to watch – Mrs Bectors, RIL, Bharti Airtel, Vodafone Idea, IL&amp;FS, InterGlobe Aviation, Future Group, Deepak Nitrite, Jubilant FoodWorks, and others</a> <a href="https://www.businessinsider.in/stock-market/news/there-are-one-of-only-17-indian-companies-out-of-500-that-aced-the-du-pont-test/articleshow/79911627.cms">There are one of only 17 Indian companies out of 500 that aced the Du Pont test</a> <a href="https://www.businessinsider.in/business/corporates/news/wipro-buyback-offer-details-and-700-million-metro-ag-deal-drives-share-price/articleshow/79911875.cms">Wipro offers 10% more to buy back shares and signs a $700 million deal with Metro AG – everything that’s driving the IT services stock higher today</a>

Payment of 1% GST in cash only for 45,000 taxpayers: DoR sources

Tax demand against Vodafone and <keyword id="128650" type="COMPANY" weightage="100" keywordseo="Cairn-Energy">Cairn Energy</keyword> can’t be disputed, said CBDT. CBDT today said they should promptly avail the one-time dispute resolution scheme announced in the Budget to close the issue by paying the principal tax and getting waiver on interest and penalty. 

	CBDT Chairman Atulesh Jindal told PTI "as long as" the retrospective amendment of the IT Act passed by Parliament remains valid, the "demand (of tax against them) remains valid."
 Jindal, in an interview to PTI, said apart from UK's Vodafone Group plc and Cairn Energy plc, there are about a dozen more such companies which are facing similar demands due to the retrospective amendment of the <keyword id="6354751" type="COMPANY" weightage="100" keywordseo="Income-Tax">Income Tax</keyword> Act. 

	"They (companies) are basically challenging the retrospective amendment. Retrospective amendments have been passed by Parliament. They have not gone against passing of retrospective amendment before any court...so, as long as the retrospective amendment is valid, the demand (of the IT department) remains valid.
 Finance Minister <keyword id="42575" type="PERSON" weightage="100" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>, in his <keyword id="117156" type="UNKNOWN" weightage="100" keywordseo="Budget-speech">Budget speech</keyword> yesterday, announced a new dispute resolution mechanism for such companies who are in confrontation with the taxman's action. 

	"In order to give an opportunity to the past cases which are ongoing under the retrospective amendment, I propose a one-time scheme of Dispute Resolution for them," Jaitley had said while presenting the Budget for 2016-17 in Parliament. 

	The scheme entails paying up of the principal tax by the company that has been served with a tax notice and at the same time getting a waiver on interest and penalty.
 

	The CBDT boss said government has always made it clear that tax disputes "are not" covered under the Bilateral Investment Promotion and Protection Agreement (BIPA).
 

	"It is a different matter that they (companies) have gone under BIPA and our stand is that tax disputes are not covered under BIPA. That's the situation. Hence, a sort of opportunity has been given to settle these disputes (in the Budget)," the Central Board of Direct Taxes (CBDT) Chairman said.
 

	He said the department cannot go back on the tax demand raised against these firms as assessment orders were "already passed" and "demands raised" before the IT Act was amended with a retrospective effect.
 

	When told that the companies involved have not shown much initial enthusiasm to the proposal, Jindal said he is hopeful and thinks "they (companies) should come forward."
 

	Commenting on the Budget proposal, Cairn spokesperson had said that "while international arbitration proceedings have commenced to seek resolution of the tax dispute, Cairn notes the efforts of the Government of India to resolve the retrospective tax issue and will study the text of the Budget speech."
 

	A Vodafone spokesperson had said: "We will of course study the details of what the Finance Minister has proposed today, while continuing to seek resolution of this matter through international arbitration.
 "Vodafone has always maintained that there was no tax to pay at the time it completed its acquisition of Hutchison business in 2007... Vodafone was the acquirer in this transaction. The company made no capital gains whatsoever." While Cairn Energy is facing a tax demand of Rs 10,247 crore on a 2006 business re-organisation it carried out in its India unit before getting it listed, Vodafone is facing tax liability over its USD 11 billion acquisition of a 67 per cent stake in the mobile-phone business owned by <keyword id="127031" type="COMPANY" weightage="100" keywordseo="Hutchison-Whampoa">Hutchison Whampoa</keyword> in 2007. 

	Jindal said a few of the other such cases of indirect transfer of assets coming under the ambit of the retrospective amendment where IT demands have not been raised proceedings are pending due to reasons like 're-opening' of the case or some other procedure, will have to go through the "approvals" and "clearances" of a Budget announced committee which will be headed by the Revenue Secretary and have the CBDT Chairman as a Member.
 

	When the Finance Minister was yesterday asked if government hopes to arrive at the desired settlement, when the involved companies are disputing the principal liability in first place, he had said: "They have two options- either to litigate or settle."

	 
	 
	(Image credits: indiatimes)

You Searched For "Vodafone tax case" and got 11 results

Vodafone wins $2 billion tax dispute case against the Indian government

Rounak Jain

Indian government brings in a bill to bury the infamous retrospective tax that haunted Cairn and Vodafone for nearly a decade

PTI

OPINION: Retrospective tax — Putting an end to a long-standing controversy

Rajeev Dimri

Vodafone has to wrap up ₹22,100 crore tax case before it can think of liquidating India business

Katya Naidu

'How do we catch hold of you' – India's Supreme Court asks Vodafone Idea and that was just one of the many barbs

Rounak Jain

Vodafone Idea presses for Rs 7,000 cr tax refund; I-T dept hesitant in view of fresh liability

PTI

Government open to out-of-court settlement with Vodafone and Cairn on tax cases

BI India Bureau

Three wise men who exited Vodafone India just in time to make millions

Preeti Soni

Hey Airtel and Vodafone-Idea! Budget 2020 may have accounted for its pound of flesh

Katya Naidu

Payment of 1% GST in cash only for 45,000 taxpayers: DoR sources

IANS

Tax demand against Vodafone and Cairn Energy remains valid

BI India Bureau

Popular Keywords

Buying Guides